Markets have been climbing the proverbial wall of worry ever since the lows of March 2009.
On every rise, Bears jump in to declare an imminent crash ahead and right then the market moves up linearly. The pattern being followed for past 8 months has been one of underlying Bull strength.
1st Week/2nd Week of Month – A key monthly low is formed – 10/2/09, 9/4/09, 7/8/09, 4/12/09, 3/6/09. 2nd week does a retest of the low and then heads higher into OE close in 3rd week. 4th week is typically a consolidation towards month end that leads us into the key lows of first week of month – 9/29/09, 8/28/09, 7/23/09 (caused consolidation and a momentum high itself), 6/29/09 etc.
Of course, no guarantees it will hold any more. But for what ever it is worth.
Same pattern repeated in October.
When will this rally stop? We have climbed 65% but there has been no buying frenzy yet. Are we headed into one? Quite possible. 10/29/09 is a key high CIT to watch out for. This buying frenzy may liquidate the Bears and pause the rally for a much needed correction before resumption higher.
Sorry no crashes either. But a correction.
10/3/09 was widely predicted as a key low by Smartp on Twitter and we have been marching up since then, with some more room left to the upside.
Good luck and safe trading!